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Employee performance metrics: Are you tracking the most important ones?

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Employee performance metrics often combine both qualitative and quantitative data to offer HR leaders a holistic picture of a workforce’s current and ongoing business impact. But getting a strong handle on the right performance metrics to track is often a complex endeavor — even for the most established organizations.

There’s not one, clear-cut way to measure employee performance, and how you choose to do so will largely depend on your company and unique workforce structure. That said, there are a few key points of measurement that every people leader should consider tracking as part of a talent management strategy.


Employee performance metrics all HR leaders should be familiar with

Workforce performance metrics provide visibility into how well individual employees are fulfilling their job duties, cast a spotlight on potential performance gaps and help you understand the big picture of how each team is contributing to overall company goals.

It’s important to remember that metrics shouldn’t be the only marker you lean on to measure performance. While they do provide valuable quantifiable insight, they don’t always paint the full picture — especially when it comes to looking at soft skills or leadership potential. 

What metrics do provide is a solid footing for assessing employee performance and progress. You can start with these five and build from there. 


Metric #1: Individual impact on company performance

When employee objectives track with larger business goals, it serves everyone involved. Employees can see their objectives within the larger framework of the company, providing context for what you’re asking them to do. Your people are equipped for success when they understand what needs to happen and why, and have a measurable roadmap for getting there. 

Measure individual impact on company performance by tracking goal completion at the individual, team and company level, as well as time to completion for each objective. 

Improve this metric by involving employees at every stage of the goal-setting process, giving them autonomy over their personal goals.

It may seem simple, but intentional goal-setting is the first step to understanding employee performance. Train managers to work one-on-one with their direct reports to help them set realistic, attainable goals and ensure they understand what role they play within the greater team and organization. Doing so helps lay the foundation for the remainder of the metrics you’re tracking.


Metric #2: Quality of work

With this metric, it’s not just whether someone is doing their job, but whether they’re doing it well. A dip in the quality of work can disrupt productivity, harm customer relationships and ultimately, negatively impact revenue.

How you measure quality of work will vary vastly based on the individual and their job function. For example, a customer-facing retail worker might be measured using customer feedback surveys or by their ability to sell a certain amount of product. On the other hand, a nurse may be measured on things such as patient outcomes. 

Improving quality of work requires that you first define what “quality” means to your business and use that as a benchmark. Then, it’s necessary to understand why quality is slipping. Is it due to inadequate training? Poor supervision? Skills gaps? Low morale on the team? The solution may be different depending on the answer.

One way to stay on top of employee work quality is to incorporate continuous feedback and self-evaluation into all regular manager/direct report meetings. During these candid conversations, management can gain insight into the cause of quality loss and work directly with the employee to find a tangible solution.


Metric #3: Learning and development

Employee skills and competencies often sit at the crux of some of these other metrics. In this era of digital transformation, skills that were once relevant are being rapidly outpaced by industry demands, and it can be difficult for employees to perform well in their roles without opportunities to grow their skills and competencies.

Measure learning & development metrics by looking at the rate at which employees are enrolling in your established learning initiatives and then assess what knowledge or skills they’ve gained or mastered. See whether they are completing their goals within the initiative, how quickly they’re reaching them and whether employees are applying their new skills in their current role or advancing within the organization as a result of their learning 

To improve learning & development metrics, take a critical look at your current learning initiatives to confirm that they’re easily accessible to your employees and feature learning opportunities that are relevant to their career goals. Another thing to consider is whether or not your workforce is even aware of the L&D programs that are available to them.

You may also want to also survey your workforce to see what they want from a development program and how you can make it more accessible for their specific needs.


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Metric #4: Productivity

When you’re measuring productivity, you’re looking at an employee’s ability to get things done efficiently. This calls for discipline and process but also welcomes creativity and innovation. For instance, high productivity can indicate that an individual has leadership potential if they are consistently finding creative solutions and optimizing processes to allow for quicker turnaround times. 

On paper, measuring productivity is a matter of looking at employee input and output. However, it’s rarely this straightforward in practice. There are countless variables that influence productivity, which is why every business has its own way of measuring it. It’s common to look at other metrics — such as absenteeism, revenue per employee, and quality of work — in order to quantify productivity.

Improving productivity is a multifaceted undertaking. The first step is pinpointing the causes of inefficiencies within the business. Are employees blocked by slow, outdated technology? Is your workforce experiencing skills gaps? Does your onboarding process set employees up for success? From there, you can determine if productivity is suffering due to a specific shortcoming or if there are org-wide issues that need deeper attention. 


Metric #5: Engagement

Employee engagement is the cornerstone for all other aspects of performance, and one which directly affects greater business metrics such as retention, turnover and productivity.

Track engagement metrics with both anecdotal and data-informed feedback. Performing pulse surveys with current employees and soliciting exit interviews from departing workers will give you insight into why your teams may be feeling less than engaged. Other metrics like turnover and absenteeism show you the actual numbers you’ll have to contend with. 

To improve engagement metrics, think beyond compensation and consider the entire employee experience your business provides. In many cases, a job is more than just a paycheck to an individual. As organizations have started to offer more flexibility, opportunities for learning and an emphasis on work-life balance and culture to their people, these factors can have just as much pull as a high wage. You can bolster engagement by finding out what it is your workforce wants and doing your best to deliver.


Employee performance for L&D leaders

Assessing employee performance typically falls under the HR/talent management umbrella, but it can be equally beneficial for L&D leaders to be knowledgeable on this subject since learning goes hand-in-hand with performance. Learning leaders should have a general familiarity with the main performance metrics that employees across the organization are measured on. This allows for a greater view of employee skills (and potential skills gaps) and can help you be more informed when structuring L&D programs and selecting learning content.


Final thoughts

Tracking these critical employee performance metrics is just one piece of the talent puzzle. Understanding what support your employees need to reach their full potential plays an equally important role

Your workforce is your most valuable asset, and prioritizing their success benefits both them and the organization overall. By giving employees the tools they need to improve their performance, you are giving them a path for advancement, while filling your talent pipeline for tomorrow.

More talent management resources: Skills gaps post a significant threat to employee performance, but you can’t address them if you don’t know they exist. Use this free skills gap analysis template to identify where your workforce falls short on skills.